Swot Analysis of Qantas

Content

Introduction...........................................................................................2

Strength.................................................................................................2

Weakness..............................................................................................3

Opportunity...........................................................................................3

sThreats..................................................................................................3

Conclusion.............................................................................................4

References............................................................................................4

                                      SWOT Analysis of Qantas Airlines

Introduction

Qantas is the world second oldest airline famous for its high standards of services and reputation. It was started in 1920 in Queensland Australia. It was started as  domestic airlines and then increased its services overseas to North America and Europe. Now its services reached to 44 nations with total number of 182 destinations globally with a crew of 32500. The main alliances of Qantas are countries like Australia, The pacific Europe and the Middle East Asia, America and Europe.

The management of the Qantas is on their toes because of the threat that Etihad is allowed to purchase the enough shares of state owned Virgin Australia. This will lead to decrease profit margins of Qantas on its domestic routes which will cause severe loss to Qantas (Coorey 2012). The major concern of the management of Qantas is that if Etihad purchase Virgin then it would be hard to compete with the state-owned competitor because of the strong financial backing from United Arab Emirates. By buying greater share in Virgin Australia Etihad would try to dominate the most profitable routes which would leave Qantas to serve the less profitable routes as per the “quasi universal service obligation”. This would lead Etihad subsidising the domestic business of Virgin and result in weakening of Qantas in domestic market. The share price of Qantas had dropped drastically when it depicted a loss of $450 million in its international routes this financial year. The main reason identified by Qantas for money loss is it being under-cut by state-owned airlines like Singapore airlines, emirates and Etihad.

To cope this situation it is necessary to do SWOT analysis of Qantas so that by using the strengths better opportunities could be developed and the threats and weaknesses could be overcome by Qantas.

Strengths

• Very strong brand reputation and trustworthy services which has proven a track record being the second oldest airline in domestic market.
• Its services very wide market through subsidiary brands like jetstar, Qantas links, Qantas Holidays etc.
• It has alliance with “One World Alliance”.
• It has a very fuel efficient aircrafts
• It is a leading airline company with prominent safety records.

Weaknesses

• The service resource of Qantas is covered due to limited resources.
• Too much concentrated on Australian markets due to its location
• The aviation market is very much price sensitive and especially with recession gripping the whole world pricing is very important factor.
• Problems in human resource because of technological advancements and reduction in expenses.
• Increase in airfare because of rice in fuel prices

Opportunities

• For its regular flyers they have launched lucrative policies by which they earn points for any kind of activities for every dollar they spend in their company like airfare, hotel bookings or whole travel itinerary.
• In order to serve more passengers new aircraft fleet has been announced which has been leased and this will help in creating more employment opportunities in Australia and expansion of airline business and enhance the servicing efficiencies.
• An advanced facilities to corporate people so that they utilise luxurious and uninterrupted services. This service gives them priority basis check-in and personal facilities such as special lounge on airports which are completely business oriented. Subscription for such business related club services can be made for one to many years (Yip.,1982).

Threats

• Causing loss of revenues or sales due to new entrants of airlines companies.
• Rising oil prices and finally fuel prices putting impact on overall financial performance of the company.
• Prominent employee who depart to other airlines which causes loss of strategic knowledge.
• Decreasing price of Australian dollars resulting in decrease in profit of the company.

Conclusion from SWOT Analysis

It can be interpreted from the above SWOT analysis that the strengths of Qantas make its brand value more respectable and an airline which increases the customer’s confidence and satisfaction. Qantas can improve its profits by maintaining and providing additional services to the people of corporate world. The wide service range should be used for catering to serve variety of socioeconomic groups and provide one stop shop solution to the holiday makers in the country. They should cut down the expenses by attaining self production and avoid ordering 3rd party. To avoid the threat of new entrants from different country they should promote their product as “I still call Australia Home”.